Crude prices fell in Asia today but losses were curbed as dealers took a breather after days of sharp sell-offs following OPEC’s decision to hold output levels despite global oversupply.
US benchmark West Texas Intermediate (WTI) for January delivery was down 66 cents to USD 68.34 while Brent crude for January was down 61 cents to USD 71.93 in mid-morning trade.
Research house Capital Economics said “a degree of calm was returning to the markets” after a free-fall that saw both contracts plunge to five-year lows.
Daniel Ang, investment analyst at Phillip Futures in Singapore, said “prices remain volatile as the market adjusts after last week’s 10 per cent drop”.
WTI yesterday closed USD 2.85 up from Friday’s settle price, after initially sinking as low as USD 63.72, a level last seen in July 2009. In London, Brent gained USD 2.39 after earlier falling to an October 2009 low of USD 67.53.
Crude prices have tumbled since the 12-nation Organization of the Petroleum Exporting Countries on Thursday said it would to keep its collective output ceiling at 30 million barrels per day, where it has stood for three years.
OPEC’s powerful Gulf members, led by kingpin Saudi Arabia, resisted the calls for a cut from poorer members, including Venezuela and Ecuador, unless they are guaranteed market share, particularly in the United States where rising production of shale oil has contributed to the global glut.
“The frenetic activity at the end of last week — notably the apparent free-fall in oil prices — was almost certainly exaggerated by the thin trading conditions due to the extended US holidays,” Capital Economics said, referring to the Thanksgiving Holiday last week.